Meijer fined record amount for violating state campaign finance law

WALKER — The secretary of state is fining Meijer Inc. a record $190,139 for violating Michigan's Campaign Finance Act and is forwarding the case to the state attorney general to determine whether there were any criminal missteps.

On Monday, the secretary of state signed two "conciliation agreements" with Meijer following a three-month investigation.

Meijer is being penalized for spending more than $100,000 to influence the outcomes of a 2005 referendum and a 2007 recall vote in Acme Township, without reporting the expenditures as required by law.

At the time, Meijer was trying to get a superstore approved near Traverse City.

The fine is the maximum civil penalty that can be imposed for the violations and the largest ever levied by the department.

"Our campaign finance laws are about openness and disclosure and in this case Meijer tried to avoid both," Secretary of State Terri Lynn Land said in a statement released today. "These violations strike at the very heart of our system of government. Our democracy encourages everyone to participate in the election process, but we must follow the rules."

The penalty arises from unreported expenditures and failure to file complete campaign spending reports. The company also was fined $1,000 for each of 20 expenditures made to outside firms in the 2007 recall election.

"The expenditures could have been made and reported by Meijer's separate fund, the Meijer Political Action Committee, but instead were paid for with corporate dollars," Land said.

In all, the state determined Meijer filed four incomplete campaign statements for the PAC in a one-year period from July 21, 2006, to July 24, 2007.

Two years earlier, Meijer also paid Seyferth $17,245 and Dickinson Wright $9,219 in a referendum on a moratorium on big-box retailers. Meijer also provided $12,400 to the Acme Taxpayers for Responsible Government in 2005, a group opposed to the moratorium, which was narrowly defeated.

The retailer violated the law in those instances by failing to file as a "ballot questioning committee" with the Grand Traverse county clerk, the state probe found. Part of Meijer's fine includes $4,800 to be paid to the clerk's office.

As part of the agreement, Meijer will correct the reporting violations in both cases and accurately disclose all expenditures made in connection to the 2005 and 2007 votes.

Internal control measures and restructuring have been taken by Meijer to prevent future violations, according to an affidavit signed by Robert VerHeulen, Meijer vice president and general counsel.

The selection of outside legal and public relations firms now must be approved by VerHeulen and Stacie Behler, the retailer's vice president of communications, according to VerHeulen, who also is mayor of Walker. The two also must keep tabs on the work being done on behalf of Meijer.

If the retailer breaks its agreement, the secretary of state can pursue criminal charges, said department spokeswoman Kelly Chesney.

What the attorney general might investigate and whether that could extend to prosecution of individuals is unclear. The secretary of state's agreement only covers Meijer Inc. and its PAC, Chesney said.

The agreement appears to fulfill the request of Grand Traverse County Prosecutor Alan Schneider, who asked the state to refrain from reaching a conciliation agreement with individuals.

He was forced to drop his criminal investigation after a Grand Traverse Circuit Court judge ruled last month the secretary of state had exclusive jurisdiction to handle campaign violations. Schneider is appealing that decision.

Schneider was asked to investigate Meijer's role in the votes by township officials targeted by the retailer in the recall. They felt Land couldn't conduct an impartial investigation because she had received political contributions from Meijer.

Two attorneys from the secretary of state's Legal and Regulatory Services Administration have been reviewing the case since mid-February, when the retailer acknowledged it may have violated to the law.

An offer was extended to Meijer last week and the retailer responded Friday that it would accept the deal. The agreements were signed Monday.

State law requires the secretary of state to first pursue a conciliatory agreement.
"We chose to seek a civil penalty because it made sense in this case and, frankly, the penalties are much stiffer if you seek the civil penalty route because the penalty can be equal to the amount of improper expenditure as opposed to a criminal penalty of up to $10,000," said Chesney, adding that a criminal conviction would have required demonstrating in a court that someone knowingly violated the law.